App Boom

We’re doomed to repeat history. Wait…what? Isn’t that the point of history to study it so we DON’T make the same boneheaded mistakes. Yes, that’s exactly why you read history books.

Yet, we are in another round of the IT glory days. Read TechCrunch for 5 minutes and you’ll just be shaking your head. What was the .com boom of the late 90s has become the new app explosion of today. Money is flying at companies that have a cool new app with a bunch of users but NO REVENUE!!!

The latest example is an app that I really like. Its being reported that Instagram is raising 40 million dollars with a 500M company valuation. While its great that they can keep the lights on and servers running, but how are they going to make money? Maybe giving away the app wasn’t your best plan. I would have paid $0.99 for the full version with maybe a free version with only a few filters. 27 millions users you say, It would have been rough having 18.9 million (27M * 70% after Apple’s cut) coming in the door if you charged for the app.

Ladies and Gentlemen…if you want to run a successful company, you need to have money coming in the door. And I’m not talking about VC money. It may help you out in the short term, but guess what, those VC guys and gals expect to get paid at some point. Stop bullshitting us with the “oh we’ll figure out a way to make money in the future, we have X million users now”. If you haven’t figured it out by now, you’re not going to asshole. And the VC that invest in you deserve every bit of loss that they get. Just don’t got public with it, screw up my 401K, and the rest of the stock market in the process.